Elizabeth Warren in Charge of Senate Banking? 😱
How crypto PAC Fairshake’s strategy could backfire 🫣
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Hey! I’m Veronica Irwin, Unchained’s regulatory reporter.
Welcome back to Unregulated. Crypto-focused PAC Fairshake has spent over $190 million this election cycle backing pro-crypto candidates. But could their strategy backfire? (Read this story on the website.)
The One Senate Race That Could Give Elizabeth Warren More Power Over Crypto
Fairshake’s push to unseat Sherrod Brown runs the risk of having the next chair of the Senate Banking Committee be even more anti-crypto.
By mid-September, various crypto-focused PACs, chief amongst them Fairshake, were spending $800,000 per day to flip Ohio’s Senate seat from 17-year Democratic incumbent Sherrod Brown to Republican candidate Bernie Moreno. Brown has been historically critical of crypto mainly on the grounds that it poses risks for everyday consumers, whereas Moreno, who founded a company that tracks car titles using blockchain, has promised to defend the industry.
But Sherrod Brown isn’t just any Senator. He’s Chair of the Senate Banking Committee, one of the most crucial committees for passing crypto legislation. If he wins, it’s possible he will not be friendly to the industry that tried hardest to defeat him. And if he loses his seat and Democrats retain control of the Senate, Elizabeth Warren, Congress’s most outspoken critic of crypto who is more active on fighting the industry than Brown, is the most likely Democrat to take over committee leadership, according to seven political insiders who spoke to Unchained.
Read more: Senate Votes to Kill SAB 121 Custody Bill: How Crypto Became So Political
That means that if the 2024 election doesn’t go according to Fairshake’s plan, it could give the most hostile to crypto elected official in Congress the power to block crypto legislation, potentially tying up key bills for at least the next two years.
Fairshake doesn’t think the election will play out that way. “Before our investment, one of the leading anti-crypto Senators was on a path to victory,” a spokesperson for Defend American Jobs, a Fairshake affiliate, told Unchained. “Now a pro-crypto leader is in a position to win.”
What Is Fairshake Thinking?
Although multiple PACs are working to defeat Brown, Fairshake accounts for the vast majority of the funds. The group alone has donated over $40 million to support Moreno’s campaign, over $39 million more than other crypto PACs supporting him including the Bitcoin Freedom PAC and The Digital Chamber, according to political fundraising tracker Open Secrets.
Five sources who spoke to Unchained said that Fairshake is betting Republicans win the Senate, which is likely—34 seats are up for election, and of the eight most competitive seats, Democrats need to win seven of them. (If it's a 50/50 tie, the vice president receives the tie-breaking vote, and theirs is considered the controlling party.)
Fairshake also figures, according to these sources, that even if Democrats do stay in control, they’ll be quieter about crypto issues. “Running against $100 million bucks isn’t fun,” one summarized, referring to the approximate size of Fairshake’s remaining war chest last quarter. According to a recent filing, the PAC now has just over $42 million cash on hand.
Read more: Here Are the Top Playmakers in Congress Shaping Crypto Law
But the race is still competitive, and Fairshake is taking a big gamble on crypto’s behalf. Whereas both Brown and Warren have said disparaging things about crypto, it’s Warren who has built the “anti-crypto army,” and has made actively fighting the industry a key piece of her political brand. And while some Democrats have become suspiciously more open-minded to crypto issues since Fairshake’s political donations began, others have dug their heels in. (The Defend American Jobs spokesperson argued that this isn’t true, saying that sources who said as much “need to refresh their Google news page because they’re about a year behind.”)
“Sherrod didn’t like crypto but he also didn’t care about it,” one source skeptical of Fairshake’s strategy wrote in a message. “Now, if [the crypto industry] spent 40 million to defeat him, he’ll really hate it.”
Although Moreno has significantly narrowed the gap between them, The Real Clear Politics average of polls still has Brown ahead by 0.6%.
A different critic of Fairshake’s strategy insinuated that, because so much of crypto lobbying is dictated by people relatively new to politics compared to other industries, they may have simply not thought through the implications. “This is one of the problems we have in the industry,” they said. Other sources were skeptical of this conclusion, asserting instead that Fairshake is over-confident their strategy to win Republicans the Senate will work.
The firm is investing not just in the Ohio election, but Senate and House races across the country. According to Open Secrets, the group has spent over $132 million on federal races this election cycle, and has raised more than $277 million overall. The Defend American Jobs spokesperson said that Open Secrets data is incorrect but did not give a precise number.
The spokesperson for Defend American Jobs said its strategy is straightforward and bipartisan. “Our mission is clear—support candidates who embrace innovation, want to protect American jobs, and are committed to working across the aisle to get things done and oppose those who do not. We are proud of the progress we have seen toward the creation of a sustainable bi-partisan coalition and a consensus that there is an urgent need to pass responsible crypto and blockchain-focused regulation that advances innovation, protects American jobs, and roots out bad actors,” he said.
Order of Succession
The reasons for why Warren would likely be next in line are convoluted. Democrats typically follow seniority rules when replacing leadership, and Warren is not the next most senior person on Senate Banking. Between Brown and Warren are three other Senators: Jack Reed, Jon Tester, and Mark Warner.
However, Reed, a Senator for Rhode Island, likely wouldn’t take the job. He’s the chair of the Senate Armed Services Committee, and Senators cannot lead multiple committees simultaneously. The Armed Services Committee is also conventionally seen as more politically valuable and important for the country, one source explained. Jon Tester, a Senator for Montana, meanwhile, is projected to lose his race to Republican candidate Tim Sheehy by significant margins.
Mark Warner could fill the role, but he is more likely to maintain his position as Chair of the Intelligence Committee, a committee he has historically been passionate about. That would leave Warren as next in line to head up the Senate Banking Committee, a role the most virulent anti-crypto Senator would likely relish.
Even if Warner gives up his spot on the intelligence committee to take the Senate Banking spot, two sources also indicated that Warner is often willing to take direction from Warren, due to her power within the Democratic party’s progressive wing. “When she wants something, she’ll get it,” one source said.
If Republicans win, it’s extremely unlikely Moreno would be leader as a brand-new senator. Though Republicans don’t follow seniority rules as strictly, it would almost definitely be Tim Scott, who is the ranking member currently. Scott has been very positive on crypto, supporting key legislation and even speaking at the Bitcoin 2024 conference.
Read more: Senator Tim Scott Goes All In on Bitcoin, Paving the Way for 2025 Crypto Legislation
But there’s no guarantee that, even if Republicans win the Senate this year, they will maintain control in 2026—potentially putting Brown or Warren in line again to control the Senate Banking Committee. Though sources said it’s difficult to predict what could happen in two years, it’s reasonable to assume that Brown would regain the chairmanship, or that Warren would be one of Senate Banking’s most senior officials for Democrats again. And while Fairshake appears determined to scare anti-crypto politicians away from taking a publicly hostile stance, their activism has had the opposite effect on Senator Warren.
“Crypto has gone heavy into supporting [the] GOP this cycle,” one source summarized. “It’s a bet we haven’t hedged well.”